Benpres pushes asset disposition program

Benpres Holdings Corp. will push its asset disposition program in line with efforts to further pare down debts as it aims to build a new and revitalized Lopez Group of Companies.

"We’re working towards bringing down our debt level to ensure that cash generation would be good for 10 to 15 years. Our subsidiaries need to be fully strong to take advantage of opportunities," Benpres president and chief operating officer Angel S. Ong said at the sidelines of the company’s stockholders’ meeting the other day.

He said the company expects to sell all or some of its interest in Manila North Luzon Tollways Corp. (MNTC) and Bayan Telecommunications Holdings Corp. (BayanTel).

Ong said talks are now underway with four groups, including Metro Pacific Corp., for the possible sale of Benpres’ one-third stake in MNTC, now valued at $51 million. He declined to name the other interested investors but said that one is a fund manager and another is engaged in the tollways construction business.

He said the divestment may be completed within six months to one year.

Ong added Benpres is also open to selling BayanTel at the right price. He said that BayanTel has attracted quite a number of companies including telecommunications giant Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom. Benpres has an 85-percent interest in BayanTel.

He, however, stressed that discussions with PLDT and Globe had been on and off. "It’s an on and off thing. No recent discussions with them. They would come back only to check on the status of current rehabilitation proceedings."

Since 2003, BayanTel has seen a steady growth of its fixed line subscriber base. As of end-March this year, fixed line subscribers have grown nine percent compared to the same period last year.

Also up for sale is Benpres’ 20-percent stake in Medical City, worth around P200 million. Medical City reportedly generates revenues of P125 million a year.

Out of Benpres’ total debt of around $400 million, $350 million is denominated in US dollars. Ong said that as a rule of thumb, every P1 decline in the exchange rate would translate to around a gain of P350 million for Benpres prior to other accounting adjustments.

With the resolution of debt-saddled water utility Maynilad Water Services Inc.’s financial problem, Benpres will work towards coming up with a new term sheet with creditors. "We need to amend our term sheet, reduce debt level and adjust expectations for ABS-CBN Broadcasting Corp."

Benpres reported a P281-million profit in the first quarter this year, a turnaround from the P144-million loss incurred the previous year because of higher revenue and foreign exchange gain.

Benpres chairman Oscar Lopez said the resolution of the issue involving Maynilad would make Benpres’ restructuring program more workable.